Coca-Cola, in mid-2015, had a share price of $41 and paid a dividend of $1.32 per share. Suppose you expect them to raise their dividend by 7% per year in perpetuity.

If their cost of capital is 8%, what share price would you expect based on the dividend growth rate?

Would you rather invest in Coca-Cola given the dividend increase or would you rather invest in a Mid-size growth company that doesnt pay a dividend? Pros and cons of each.